2018 – Solved Question Paper | Industrial Relation | Final Year – Masters of Commerce (M.Com) | Dibrugarh University

2018 – Solved Question Paper | Industrial Relation | Final Year – Masters of Commerce (M.Com) | Dibrugarh University



(Industrial Relation)

Full Marks: 80

The figures in the margin indicate full marks for the questions.

1(a) Discuss the main objectives of Industrial Relations. Highlight its Importance in an industry. (8+8=16)

-> Industrial relations may be defined as the relations and interactions in the industry particularly between the labour and management as a result of their composite attitudes and approaches in regard to the management of the affairs of the industry, for the betterment of not only the management and the workers but also of the industry and the economy as a whole.

The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.

Industrial relation is the relation in the industry created by the diverse and complex attitudes and approaches of both management and workers in connection with the management of the industry.

Objectives of IR:

The primary objective of industrial relations is to maintain and develop good and healthy relations between employees and employers or operatives and management. The same is sub- divided into other objectives.

Thus, the objectives of Industrial Relation are designed to:

1. Establish and foster sound relationship between workers and management by safeguarding their interests.

2. Avoid industrial conflicts and strikes by developing mutuality among the interests of concerned parties.

3. Keep, as far as possible, strikes, lockouts and gheraos at bay by enhancing the economic status of workers.

4. Provide an opportunity to the workers to participate in management and decision making process.

5. Raise productivity in the organisation to curb the employee turnover and absenteeism.

6. Avoid unnecessary interference of the government, as far as possible and practicable, in the matters of relationship between workers and management.

7. Establish and nurse industrial democracy based on labour partnership in the sharing of profits and of managerial decisions.

8. Socialise industrial activity by involving the government participation as an employer.

The importance of industrial relation is as follows:

1. It establishes industrial democracy: Industrial relations means settling employees problems through collective bargaining , mutual cooperation and mutual agreement amongst the parties i.e., management and employees unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization.

2. It contributes to economic growth and development: Good industrial relations lead to increased efficiency and hence higher productivity and income. This will result in economic development of the country.

3. It improves morale of the work force: Good industrial relations, built-in mutual cooperation and common agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.

4. It ensures optimum use of scare resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.

5. It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in banning of the unfair practices being used by employers or trade unions.

6. It prompts enactment of sound labor legislation: Industrial relations necessitate passing of certain labor laws to protect and promote the welfare of labor and safeguard interests of all the parties against unfair means or practices.

7. It facilitates change: Good industrial relations help in improvement of cooperation, team work, performance and productivity and hence in taking full advantages of modern inventions, innovations and other scientific and technological advances. It helps the work force to adjust themselves to change easily and quickly

(b) Discuss in brief, the various elements required for a Successful Industrial Relations Programme. (16)

-> Industrial relations or employment a relation is the multidisciplinary academic field that studies the employment relationship; that is, the complex interrelations between employers and employees, labor/trade unions, employer organizations and the state.

Factors Affecting Industrial Relations –

1. Institutional factors

2. Economic factors

3. Social factors

4. Technological factors

5. Psychological factors

6. Political factors

7. Enterprise-related factors

8. Global factors

These interrelated and interdependent factors determine the texture of industrial relations in any setting. In fact, they act, interact, and reinforce one another in the course of developing the industrial relations.

1. Institutional Factors: Under institutional factors are included items like state policy, labour laws, voluntary codes, collective bargaining agreements, labour unions, employers’ organizations / federations etc.

2. Economic Factors: Under economic factors are included economic organizations, (socialist, communist, capitalist) type of ownership, individual, company — whether domestic or MNC, Government, co­operative ownership) nature and composition of the workforce, the source of labour supply, labour market relative status, disparity of wages between groups, level of unemployment, economic cycle. These variables influence industrial relations in myriad ways.

3. Social Factors: Under social factors items like social group (like caste or joint family) creed, social values, norms, social status (high or low) — influenced industrial relations in the early stages of industrialization. They gave rise to relationship as master and servant, haves and have-nots, high caste and low caste, etc. But with the acceleration of industrialization, these factors gradually lost their force but one cannot overlook their importance.

4. Technological Factors: Under technological factors fall items like work methods, type of technology used, rate of technological change, R&D activities, ability to cope with emerging trends, etc. These factors considerably influence the patterns of industrial relations, as they are known to have direct influence on employment status, wage level, collective bargaining process in an organization.

5. Psychological Factors: Under psychological factors fall items pertaining to industrial relations like owners’ attitude, perception of workforce, workers’ attitude towards work, their motivation, morale, interest, alienation; dissatisfaction and boredom resulting from man-machine interface. The various psychological problems resulting from work have a far-reaching impact on workers’ job and personal life, that directly or indirectly influences industrial relation system of an enterprise.

6. Political Factors: The political factors are political institutions, system of government, political philosophy, attitude of government, ruling elite and opposition towards labour problems. For instance, the various communist countries prior to the adoption of new political philosophy, the industrial relations environment was very much controlled by the Government ever since change has altered considerably like other capitalist economics.

7. Enterprise-Related Factors: Under enterprise-related factors, fall issues like style of management prevailing in the enterprise, its philosophy and value system, organizational climate, organizational health, extent of competition, adaptability to change and the various human resources management policies.

8. Global Factors: Under global factors, the various issues included are international relations, global conflicts, dominant economic-political ideologies, global cultural milieu, economic and trading policies of power blocks, international trade agreements and relations, international labour agreements (role of ILO) etc.

2(a) Explain briefly the Problems of Trade Union in India. What measures can you suggest to overcome these problems? (8+8=16)

-> Problems of Trade Union in India:-

1. Small Size:

According to the veteran trade union leader V.V. Giri, “the trade union movement in India is plagued by the predominance of small sized unions”. To quote there were 9,023 trade unions submitting returns during the year 1992. The total membership of these unions was 57.4 lakhs, with an average membership of 632 per union. Nearly three-fourths of the unions have a membership of less than 500. Smallness in size of the union implies, among other things, weakness in bargaining power.

2. Poor Finance:

Small size of unions has its direct bearing on its financial health. Total income and total expenditure of 9,073 trade unions with a membership of 57.4 lakhs were Rs. 3,238 lakhs and Rs. 2,532 lakhs respectively in 1992. The per member income and expenditure, thus, come to Rs. 56.4 and Rs. 44.1 respectively”. These are, by all means, very low. It is the small size of trade unions accompanied by small subscriptions; the trade unions cannot undertake welfare activities.

3. Politicisation:

A serious defect of the trade union movement in India is that the leadership has been provided by outsiders’ especially professional politicians. Leaders being affiliated to one or the other party, the unions were more engrossed in toeing the lines of their political leaders than protecting workers’ interests.

Ironically, in many cases, the political leaders possess little knowledge of the background of labour problems, fundamentals of trade unionism, the techniques of industry, and even little general education. Naturally, unions cannot be expected to function efficiently and on a sound basis under the guidance of such leaders.

4. Multiplicity of Unions:

Of late, trade unionism in India is also characterised by multiplicity of unions based on craft, creed and religion. This is well indicated by the socio-political realities after the mandalisation of polity and heightened sectarian consciousness after the demolition of the disputed structure of Ayodhya.

As noted earlier, the multiplicity of unions is mind-boggling in the DTC (50), the SAIL (240) and the Calcutta Corporations (100). The implication of multiplicity of trade unions is that it leads to union’s rivalry in the organization. Obviously, multiplicity of unions contributes to fragmentation to workers leading to small-sized unions.

5. Lack of Enlightened Labour Force:

The lack of an enlightened labour force capable of manning and conducting the movement efficiently, purposefully and effectively has been a major problem in the development of trade unions in the country. Lack of education, division by race religion, language and caste, migratory nature, lack of self consciousness, and non-permanent class of workers have been attributed as the causes for the lack of enlightened labour force in India.

6. Miscellaneous Problems:

The other problems from which trade union movement has suffered include:

(i) The majority of registered unions are independent unions as only 16,000 units out of 50,000 registered unions are affiliated to the Central Trade Unions (CTUs). One possible reason for this IS the educated workers’ preference to the independent unions,

(ii) It is also found that about 90% of workers in the public sector are unionized while in case of the private sector only 30 % workers are unionized”. This is a World-Wide trend, not only featuring in India. But it has a serious implication for trade union movement in India as more and more public sector undertakings are privatized. In turn, the trade union membership is to decline, a trend already visible by now.

(iii) Given the fast changing industrial scenario, jobs are moving from the organized formal sector to informal sector. However, the unorganised sector which constitutes about 90% of the total work force does not come under the purview of the trade unions.

The Second Five-Year Plan scanned the defects of the trade union movement in India as follows:

“Multiplicity of trade unions, political rivalries, lack of resources, disunity in the ranks of workers etc., is some of the major weaknesses in a number of existing unions”.

Measures to overcome with this problem:-

1. Maintaining Unity:

Past experiences indicate that multiplicity of unions; political rivalries, disunity among the ranks of workers, etc. have been in India. Unity in the movement is, therefore, a necessity because “Unity is the strength”.

Unity in trade unions can be stricken and maintained in different ways:

(i) All wooers should join hands to form a single union to represent all their demands.

(ii) All unions with different political affiliations should have one policy, one programme, one objective and one method for the labour movement.

Here the role of unity among workers in the TISCO, Jamshedpur is worth citing:

“TISCO has a reputation in the country for cordial industrial relations which is the envy of other corporations. There has been no strike in Jamshedpur over an industrial dispute for more than fifty years. The Tata Workers’ Union, which is the recognized union in Jamshedpur, has such excellent relations with the management that when a move was made by interested politician in 1978 to nationalize the company, the union, on its own, made a strong representation to the Prime Minister against such a move:

2. Free from Political influence:

At present, trade union leadership is in the hands of politicians who have more concern for their political ideologies than for the interest of working class. This has weakened the labour movement. Therefore, one way to strengthen the trade union movement is the provision of leaders from the ranks of the workers themselves.

These union leaders should be full-time paid officers of the unions having qualities such as literate, organising capacity, hardworking cool in temper and patience Leadership qualities among the workers can also be developed through education and training It is this realisation that the Asian Trade Union College, at Kolkata is set up to tram educated young men, particularly from the working classes, in trade unions.

3. Workers Education:

So far trade unions have confined their attention to its members’ demands only. It is now high time for trade unions to assume the responsibility workers a sense of discipline and responsibility to perform their jobs satisfactorily. The workers need to be made understand fully first their duties and responsibilities and then their rights and privileges. Or say, the workers need to be taught “first deserve, then desire”.

4. Adequacy of Funds:

Particularly, small-sized firms suffer from their weak financial position. On account of poor financial resources, the workers movements/strikes did not prolong and ended in failure Therefore, the maintenance of strike funds by the union is a necessity. This strike fund would be used to help workers during strikes – as “strike pay”. This will not only strengthen the bargaining position of the unions, but they will also get the loyalty of the workers.

5. Welfare Activities for Workers:

Along with efforts to improve the financial status, the trade unions may effectively start activities such as the provision of day schools for children, creches at work place, and night schools for adults, reading rooms, libraries, co-operative stores, gymnasium, etc.

It is gratifying that various labour organisations like the Textile Labour Association, Ahmedabad; the Hindustan Mazdoor Sewak Sangh and the INTUC have been doing some works in this direction. These efforts help make workers loyal to their unions.

(b) “Workers’ Education is an integral part of a successful Industrial Relation Environment.” Explain.

-> Workers’ education is a means of providing workers and their representatives with the training they need to play an effective role in the economic and social life of their societies. At the same time it can also make a significant contribution to the dissemination of information on the various aspects of the work of the International Labour Organization which affects the interest of workers.

Under the responsibility of the Bureau of Workers’ Activities (ACTRAV), an important labour education programme is delivered in all regions, as well as at the International. Training Centre of the ILO. The ACTRAV-Turin Programme responds to the training needs of workers’ organizations with the delivery of training courses, training materials, specific projects and advisory services. Some of the programme’s objectives are:

‱ strengthening the process of institution and capacity building of trade unions;

· increasing the capacity of trade unions to plan and deliver educational programmes in line with their educational policies;

· strengthening staff development within trade unions;

· developing human resource within workers’ organisations, particularly the staff serving those organisations;

· strengthening tripartism and social dialogue with the development of bipartite and tripartite courses;

· promoting gender mainstreaming in all the activities of trade unions;

· promoting the development of union networks with the support of information technology and the exchange of union practices and policies; and

· providing training to trade unions on ways and means to be better involved in the enforcement and development of ILO Standards and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up.

The ILO Convention about education and training, the Human Resources Development Convention, 1975 (No. 142) provides that the ratifying State shall adopt and develop comprehensive and co-ordinated policies and programmes of vocational guidance and vocational training closely linked with employment, in particular through public employment services.


The basic purpose of is that; Workers’ education is designed to develop the workers’ understanding of “Labour Problems” in the broadest sense.

Thus it is not an end in itself and should always be regarded as a means to useful action.

However, education as a tool for individual and organizational growth cannot be over looked. Although social action is a key entity especially in workers education today, Workers’ education always regards knowledge as a potential tool.


The are basically five key objectives of workers education and these include;

1. Individual development

· A universal instrument for advancing the dignity of man and for gladdening his existence

· Will apply every power of thought and force of action to enlighten ignorance, alleviate misfortune, remove misery and banish vice

2. Stability and coherence in society

· The interaction between education and social change is clearly a more complex matter than appeared to such idealist reformers

· To avoid many uprisings by workers through providing equitable and uniform, and just treatment across board. But many times, this has not been the case especially in capitalist economies

3. Change and transformation in society

  • Positive instrument of change rather than just a protection

· Its object is not fit workers for their individual struggle for existence, but for the collective struggle for emancipation.

· Workers’ education is, not like a Man’s bridge as an end in itself, but as a means to social action.

· Largely Laissez-faire societies with relative freedom of speech, press and association

4. Efficient Workers’ organizations

Over-all programmes, namely:

· To improve their students ability to handle the tools of study and of social action

· To arouse and strengthen interest in trade unionism

· As a natural sequence, to give workers a better understanding of labour problems (including their political, economic and social implications).

· To equip trade unionists (officers and rank-and-file members) with livelihood skills and appropriate positive attitudes for social responsibility

Features of Workers’ Education

· Workers’ education is varied and varying from place to place and from time to time

· Workers education must be education of workers for workers’ needs-and, if it is to succeed, must be supported by workers and their organizations.

· Workers’ education must aim primarily at an understanding of labour, social and economic problems of direct interest to workers and their organizations.

· Workers education must help workers and their leaders to assume more industrial, civic and social responsibility.

3(a) Discuss the concept and features of Labor Welfare as laid down in the Constitution.

-> Labor welfare, relates to taking care of the well-being of workers by employers, trade unions, government and non-government agencies.

It deals with the provision of opportunities for workers and his family/her family for a good life as understood in most comprehensive sense.

The basic purpose of employee welfare is to improve the working class and thereby make him a happy employee and good citizen.

Employee welfare is an important part of social welfare. It involves adjustment of employee’s work life with family life and social life.

Voluntary measures may be both voluntary and statutory. Statutory measures are prescribed by law whereas voluntary measures are a result of philanthropic feeling of employer.

The Labour Investigation Committee preferred to include under labour welfare “anything done for intellectual, physical, moral and economic betterment of the workers, whether by employers, by Government or by other agencies, over and above what is laid down by law, or what is normally expected on the part of the contracted benefits for which workers may have bargained.”

According to the Committee on Labour Welfare, welfare services should mean ‘such services, facilities and amenities as adequate canteens, rest and recreation facilities, sanitary and medical facilities, arrangements for travel to and from the accommodation of workers employed at a distance from their homes and such other services, amenities and facilities including social security measures, which contribute to conditions under which workers are employed.’

Labour welfare activities may be classified into two categories, viz.:

(a) Statutory welfare activities;

(b) Voluntary welfare activities.

Statutory welfare activities have to taken up by every employer as per the provisions of various labor enactments. Such provisions may relate to working conditions, hours of work, industrial safety and various other facilities to be provided to the workers to make their work smooth and enjoyable.

Voluntary welfare activities are undertaken by the employers without compulsion of any law. They include such activities conducive to the welfare of the workers which are undertaken by the employers on their own free will. They are also taken up by some social organisations.

Features of Labor Welfare:-

1) Employees Welfare measures includes various facilities, services and amenities provided to employees for improving their health, efficiency, economic betterment and social status too.

2) Employees Welfare measures are in addition to their wages and services. It is given under some legal provision and collective bargaining.

3) Employees Welfare schemes are flexible and not static therefore it is ever changing and added to the existing schemes from time to time.

4) These employee welfare measures may be introduced by the Government, employees or by social, charitable or religions institution.

5) The aim behind labor welfare scheme is to develop overall personality of the employees and to retain them as the best workforce.

6) By introducing labor welfare schemes, employees are successful in creating efficient, healthy, loyal motivated, enthusiastic work force in the organisation and to make their work life better and improves their standard of living.

(b) Critically discuss the scenario of the workers’ participation in Management with special reference to India. (16)

-> Workers Participation in Management in Indian Industries

Workers’ participation in Management in India was given importance only after Independence. Industrial Disputes Act,1947 was the first step in this direction, which recommended for the setting up of works committees. The joint management councils were established in 1950 which increased the labour participation in management. Since July 1975 the two-tier participation called shop councils at shop level and Joint councils were introduced. Workers’participation in Management Bill, 1990 was introduced in Parliament which provided scope for up liftment of workers.

Reasons for failure of Workers participation Movement in India:

1. Employers resist the participation of workers in decision-making. This is because they feel that workers are not competent enough to take decisions.

2. Workers’ representatives who participate in management have to perform the dual roles of workers’ spokesman and a co-manager. Very few representatives are competent enough to assume the two incompatible roles.

3. Generally Trade Unions’ leaders who represent workers are also active members of various political parties. While participating in management they tend to give priority to political interests rather than the workers’ cause.

4. Schemes of workers’ participation have been initiated and sponsored by the Government.However, there has been a lack of interest and initiative on the part of both the trade unions and employers.

5. In India, labour laws regulate virtually all terms and conditions of employment at the workplace. Workers do not feel the urge to participate in management, having an innate feeling that they are born to serve and not to rule.

6. The focus has always been on participation at the higher levels, lower levels have never been allowed to participate much in the decision-making in the organizations.

7. The unwillingness of the employer to share powers with the workers’ representatives, the disinterest of the workers and the perfunctory attitude of the government towards participation in management act as stumbling blocks in the way of promotion of participative management.

Measures for making Participation effective:

1. Employer should adopt a progressive outlook. They should consider the industry as a joint endeavor in which workers have an equal say. Workers should be provided and enlightened about the benefits of their participation in the management.

2. Employers and workers should agree on the objectives of the industry. They should recognize and respect the rights of each other.

3. Workers and their representatives should be provided education and training in the philosophy and process of participative management. Workers should be made aware of the benefits of participative management.

4. There should be effective communication between workers and management and effective consultation of workers by the management in decisions that have an impact on them.

5. Participation should be a continuous process. To begin with, participation should start at the operating level of management.

6. A mutual co-operation and commitment to participation must be developed by both management and labour.

Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a manager; never the twain shall meet” should be replaced by “managers and workers are partners in the progress of business”

Forms of Workers Participation in Management in India

Forms of workers’ participation in management

The various forms of workers’ participation in management currently prevalent in the country are:

1. Suggestion schemes: Participation of workers can take place through suggestion scheme. Under this method workers are invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion box is installed and any worker can write his suggestions and drop them in the box. Periodically all the suggestions are scrutinized by the suggestion committee or suggestion screening committee. The committee is constituted by equal representation from the management and the workers. The committee screens various suggestions received from the workers. Good suggestions are accepted for implementation and suitable awards are given to the concerned workers. Suggestion schemes encourage workers’ interest in the functioning of an enterprise.

2. Works committee: Under the Industrial Disputes Act, 1947, every establishment employing 100 or more workers is required to constitute a works committee. Such a committee consists of equal number of representatives from the employer and the employees. The main purpose of this committee is to provide measures for securing and preserving amity and good relations between the employer and the employees.
Functions: Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees are concerned with:

o Conditions of work such as ventilation, lighting and sanitation.

o Amenities such as drinking water, canteens, dining rooms, medical and health services.

o Educational and recreational activities.

o Safety measures, accident prevention mechanisms etc.

o Works committees function actively in some organizations like Tata Steel, HLL, etc but the progress of Works Committees in many organizations has not been very satisfactory due to the following reasons:

o Lack of competence and interest on the part of workers’ representatives.

o Employees consider it below their dignity and status to sit alongside blue-collar workers.

o Lack of feedback on performance of Works Committee.

o Undue delay and problems in implementation due to advisory nature of recommendations.

3. Joint Management Councils: Under this system Joint Management Councils are constituted at the plant level. These councils were setup as early as 1958. These councils consist of equal number of representatives of the employers and employees, not exceeding 12 at the plant level. The plant should employ at least500 workers. The council discusses various matters relating to the working of the industry. This council is entrusted with the responsibility of administering welfare measures, supervision of safety and health schemes, scheduling of working hours, rewards for suggestions etc.

Wages, bonus, personal problems of the workers are outside the scope of Joint management councils. The council is to take up issues related to accident prevention, management of canteens, water, meals, revision of work rules, absenteeism, indiscipline etc. the performance of Joint Management Councils have not been satisfactory due to the following reasons:

o Workers’ representatives feel dissatisfied as the council’s functions are concerned with only the welfare activities.

o Trade unions fear that these councils will weaken their strength as workers come under the direct influence of these councils.

4. Work directors: Under this method, one or two representatives of workers are nominated or elected to the Board of Directors. This is the full-fledged and highest form of workers’ participation in management. The basic idea behind this method is that the representation of workers at the top-level would usher Industrial Democracy, congenial employee-employer relations and safeguard the workers’ interests. The Government of India introduced this scheme in several public sector enterprises such as Hindustan Antibiotics, Hindustan Organic Chemicals Ltd etc. However the scheme of appointment of such a director from among the employees failed miserably and the scheme was subsequently dropped.

5. Co-partnership: Co-partnership involves employees’ participation in the share capital of a company in which they are employed. By virtue of their being shareholders, they have the right to participate in the management of the company. Shares of the company can be acquired by workers making cash payment or by way of stock options scheme. The basic objective of stock options is not to pass on control in the hands of employees but providing better financial incentives for industrial productivity. But in developed countries, WPM through co-partnership is limited.

6. Joint Councils: The joint councils are constituted for the whole unit, in every Industrial Unit employing 500 or more workers; there should be a Joint Council for the whole unit. Only such persons who are actually engaged in the unit shall be the members of Joint Council. A joint council shall meet at least once in a quarter. The chief executive of the unit shall be the chairperson of the joint council. The vice-chairman of the joint council will be nominated by the worker members of the council. The decisions of the Joint Council shall be based on the consensus and not on the basis of voting.

In 1977 the above scheme was extended to the PSUs like commercial and service sector organizations employing 100 or more persons. The organizations include hotels, hospitals, railway and road transport, post and telegraph offices, state electricity boards.

7. Shop councils: Government of India on the 30th of October 1975 announced a new scheme in WPM. In every Industrial establishment employing 500 or more workmen, the employer shall constitute a shop council. Shop council represents each department or a shop in a unit. Each shop council consists of an equal number of representatives from both employer and employees. The employers’ representatives will be nominated by the management and must consist of persons within the establishment. The workers’ representatives will be from among the workers of the department or shop concerned. The total number of employees may not exceed 12.

4(a) “Collective bargaining is also considered as a tool to settle Industrial disputes in Industries”. Explain. (16)

-> Collective bargaining is a term used to describe the procedure, whereby employers must attempt to reach an agreement regarding terms of employment and the working conditions of labour with the trade unions, instead of with individual workers.

Collective bargaining is a process of discussion and negotiation between an employer and a trade union culminating in a written agreement and the adjustment of problems arising under the agreement. The Supreme Court of India has defined the process of collective bargaining as a technique by which, dispute as to conditions of employment is resolved amicably by agreement rather than coercion. Workers, who are generally represented by a trade union, use this medium to express their grievance about various issues such as wages and working conditions.

Procedure for initiating collective bargaining

1. A charter of demands

The trade union will notify the employer for initiating collective bargaining negotiations. The representatives of the trade union draft a charter of demands which contains issues related to terms of employment and the working conditions namely wages and allowances, bonuses, working hours, benefits, holidays. In some cases, an employer may also notify the trade union and initiate collective bargaining negotiations.

2. Negotiations

Negotiation is the next step after the submission of the charter of demands by the trade union. Both the employer and the employee seek opportunities to suggest compromise solutions in their favour until an agreement is reached. If it impossible to reach out to an agreement, a third party (mediator / arbitrator) may be brought in from outside. If, even with the assistance of the third party, no viable solution can be found to resolve the parties’ differences, the trade union may decide to engage in strikes.

3. Collective bargaining agreement

Pursuant to the negotiations between the parties, a collective bargaining agreement will be executed between the employer and workmen represented by trade unions, setting out the terms of employment and the working conditions of labour.

4. Strikes

If both parties fail to reach an agreement because of mutual consensus, the union may go on a strike, which shall be in accordance with the provisions of the Industrial Disputes Act 1947 (“ID Act”).

5. Conciliation

Once the conciliation officer receives a notice of strike or lockout, the conciliation proceedings shall commence. The State Government may appoint a conciliation officer or a Board of Conciliation to investigate disputes, mediate and promote a settlement. Workers are prohibited from going on strike during the pendency of such conciliation proceedings. Conciliation proceeding may have one of the three outcomes, namely (i) a settlement; or (ii) no settlement; or (iv) reference being made to the appropriate labour court or any other industrial tribunal.

6. Compulsory arbitration or adjudication

When conciliation and mediation fail, parties may either resort to compulsory or voluntary arbitration. Arbitration and the recommendations of the arbitrator may be binding to the parties. Section 7A of the ID Act provides for a labour court or industrial tribunal within a state to adjudicate protracted industrial disputes such as strikes and lockouts. Section 7B of the ID Act provides for constitution of national tribunals to resolve disputes involving questions of national interest or issues concerning more than two states. In the event, a labour dispute is not resolved by conciliation

and mediation, the employer, and the workers may refer the case by a written agreement to a labour court, industrial tribunal or national tribunal for adjudication or compulsory arbitration.

The following types of collective bargaining agreements are prevalent in India:

1. Bipartite agreements

These agreements are a result of voluntary negotiations between employer and trade union and are binding, as per the provisions of the ID Act.

2. Settlements

It is tripartite in nature as it involves the employer, trade union and the conciliation officer. Settlements arise out of specific disputes which is resolved by a reconciliation officer. If, during the conciliation proceedings, the conciliation officer believes at any point of time that there is a possibility of reaching a settlement, then the officer may withdraw himself from the negotiations. The parties are free to finalise the terms of the agreement and must inform the conciliation officer within a specified timeframe if such an agreement is reached after his withdrawal.

3. Consent awards

These are agreements reached while a dispute is pending before an adjudicatory authority. Such agreement is incorporated in the authority’s award and although the agreement is reached voluntarily between parties, it becomes binding under the award passed by the authority.


Refusal by the employer to bargain collectively in good faith is an unfair labour practice as per the ID Act. Collective bargaining agreements between the trade union and employers are enforceable under Section 18 of the ID Act. For a successful process of collective bargaining, it must begin with proposals

rather than demands and the parties should be ready to negotiate and compromise. The process of collective bargaining enables healthy discussions between workers and employers and facilitate the growth of industrial relations. Having said that, collective bargaining by trade unions often tends to be an arm-twisting exercise given the political affiliation of trade unions in India and it is more about the show of strength by the trade union as opposed to a good faith effort to negotiate genuine demands of workers.

Main Features of Collective Bargaining:

Some of the salient features of collective bargaining are:

1. It is a Group Action:

Collective bargaining is a group action as opposed to individual action. Both the parties of settlement are represented by their groups. Employer is represented by its delegates and, on the other side; employees are represented by their trade union.

2. It is a Continuous Process:

Collective bargaining is a continuous process and does not end with one agreement. It provides a mechanism for continuing and organised relationship between management and trade union. It is a process that goes on for 365 days of the year.

3. It is a Bipartite Process:

Collective bargaining is a two party process. Both the parties—employers and employees— collectively take some action. There is no intervention of any third party. It is mutual given-and-take rather than take-it-or-leave-it method of arriving at the settlement of a dispute.

4. It is a Process:

Collective bargaining is a process in the sense that it consists of a number of steps. The starting point is the presentation of charter of demands by the workers and the last step is the reaching of an agreement, or a contract which would serve as the basic law governing labour-management relations over a period of time in an enterprise.

5. It is Flexible and Mobile and not Fixed or Static:

It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties is reached.

6. It is Industrial Democracy at Work:

Collective bargaining is based on the principle of industrial democracy where the labour union represents the workers in negotiations with the employer or employers. Industrial democracy is the government of labour with the consent of the governed—the workers. The principle of arbitrary unilateralism has given way to that of self-government in industry. Actually, collective bargaining is not a mere signing of an agreement granting seniority, vacations and wage increase, by sitting around a table.

7. It is Dynamic:

It is relatively a new concept, and is growing, expanding and changing. In the past, it used to be emotional, turbulent and sentimental, but now it is scientific, factual and systematic.

8. It is a Complementary and not a Competitive Process:

Collective bargaining is not a competitive process i.e., labour and management do not coopt while negotiating for the same object. It is essentially a complementary process i.e., each party needs something which the other party has, namely, labour can put greater productive effort and management has the capacity to pay for that effort and to organise and guide it for achieving the enterprise’s objectives.

The behavioural scientists have made a good distinction between “distributive bargaining” and “integrative bargaining”. The former is the process of dividing up the cake which represents what has been produced by the joint efforts of management and labour.

In this process, if one party wins something, the other party, to continue the metaphor of the cake, has a relatively smaller size of the cake. So it is a win-lose’ relationship. The integrative bargaining, on the other hand, is the process where both the parties can win—each party contributing something for the benefit of the other party.

9. It is an Art:

Collective bargaining is an art, an advanced form of human relations.

(b) What do you mean by Industrial Disputes? Mention various causes for Industrial disputes in Indian Companies. (6+10=16)

-> An industrial dispute is defined as a conflict or a difference in opinion between management and workers regarding employment. It is a disagreement between an employer and employees representative i.e. trade union. The issue of disagreement is usually pay or other working conditions.

Different forms of Industrial Disputes:-

1. Strikes:

A strike is a very powerful weapon used by trade unions and other labour associations to get their demands accepted. It generally involves quitting of work by a group of workers for the purpose of bringing the pressure on their employer so that their demands get accepted. When workers collectively cease to work in a particular industry, they are said to be on strike.

According to Industrial Disputes Act 1947, a strike is “a cessation of work by a body of persons employed in an industry acting in combination; or a concerted refusal of any number of persons who are or have been so employed to continue to work or to accept employment; or a refusal under a common understanding of any number of such persons to continue to work or to accept employment”.

This definition throws light on a few aspects of a strike. Firstly, a strike is a referred to as stoppage of work by a group of workers employed in a particular industry. Secondly, it also includes the refusal of a number of employees to continue work under their employer.

In a strike, a group of workers agree to stop working to protest against something they think is unfair where they work. Labours withhold their services in order to pressurize their employment or government to meet their demands. Demands made by strikers can range from asking for higher wages or better benefits to seeking changes in the workplace environment. Strikes sometimes occur so that employers listen more carefully to the workers and address their problems.

2. Lockouts:

A lockout is a work stoppage in which an employer prevents employees from working. It is declared by employers to put pressure on their workers. This is different from a strike, in which employees refuse to work. Thus, a lockout is employers’ weapon while a strike is raised on part of employees.

According to Industrial Disputes Act 1947, lockout means the temporary closing of a place of employment or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him.

A lockout may happen for several reasons. When only part of a trade union votes to strike, the purpose of a lockout is to put pressure on a union by reducing the number of members who are able to work.

For example, if a group of the workers strike so that the work of the rest of the workers becomes impossible or less productive, the employer may declare a lockout until the workers end the strike. Another case in which an employer may impose a lockout is to avoid slowdowns or intermittent work-stoppages. Occupation of factories has been the traditional method of response to lockouts by the workers’ movement.

3. Picketing:

When workers are dissuaded from work by stationing certain men at the factory gates, such a step is known as picketing. If picketing does not involve any violence, it is perfectly legal. Pickets are workers who are on strike that stand at the entrance to their workplace. It is basically a method of drawing public attention towards the fact that there is a dispute between the management and employees.

The purpose of picketing is:

a. To stop or persuade workers not to go to work

b. To tell the public about the strike

c. To persuade workers to take their union’s side

4. Gherao:

Gherao in Hindi means to surround. It denotes a collective action initiated by a group of workers under which members of the management are prohibited from leaving the industrial establishment premises by workers who block the exit gates by forming human barricades. The workers may gherao the members of the management by blocking their exits and forcing them to stay inside their cabins. The main object of gherao is to inflict physical and mental torture to the person being gheraoed and hence this weapon disturbs the industrial peace to a great extent.

Causes of Industrial Disputes

The causes of industrial disputes are many and varied. The major ones related to wages, union rivalry, political interference, unfair labour practices, multiplicity of labour laws, economic slowdown and others.

Wage Demands

By far, the most important cause for disputes is related to wages. The demand for wages has never been fully met because of inflation and high cost of living. High inflation results in increased cost of living resulting in never-ending demands from unions. Management and Unions have wage agreement generally valid for three years. Each new agreement is preceded by a prolonged battle between managements and unions, often resulting in strikes and lockouts. Agreement reached in one company will inspire unions in other plants in the locality, and make them pitch tents demanding similar rise in wages.
Closely related to wages are bonus, incentives, and other allowances. Of all these, wages have been a major issue of contention that leads to disputes.

Union Rivalry

Multiplicity of unions leads to inter-union rivalries. If one union agrees to a wage settlement, another union will oppose it. The consequence is never-ending disputes, as has been happening at the Singareni Collieries.

Political Interference

Major trade unions are affiliated to political parties. Political affiliation is not peculiar to our country alone. Even a cursory assessment of labour movements around the world would show that trade unions are, by their very nature, political, and that politicisation of labour is the rule rather than the exception.

Unfair Labour Practices

Majority of disputes are management inspired. The following points 2 justify the assertion:

1. The management is generally not willing to talk over any disputes with the employees or the representatives, or refer it to ‘arbitration’ even when trade unions want it so, and this enrages the workers.

2. A management’s unwillingness to recognise a particular trade union and the dilatory tactics to which it resorts while verifying the representative character of any trade union have been a source of industrial strife.

Multiplicity of Labour Laws

Labour laws in our country, as in several other countries, have been enacted to create conditions for the protection of labour from unfair employment practices and to provide a legal framework within which Industrial Relations is to be regulated.

Labour legislation is regarded as the most dynamic institution. From a simple restraint on child labour in 1881, labour legislation in our country has become an important agency of the State for the regulation of working and living conditions of workers, as indicated by the rising number and variety of labour acts. This rapid development of labour legislation is an integral part of the modern social organisation.

Economic Causes

Really, the most common causes of industrial disputes are economic causes. The demand for wage increase is the prime-most cause of the industrial disputes.

Managerial Causes of Industrial Disputes:

These causes include autocratic managerial attitude and defective labour policies etc. …

Government Machinery :

Government measures to prevent and machinery to settle the disputes are not much effective. Incapability of understanding and answering imperatives of development.

Wage Boards

Wages and allowances is the main issue in industrial disputes. The Government of India set up wage boards for various industries.

Standing Orders

In order to avoid frictions between employer and his workmen over the terms of employment, the Government enacted the Industrial Employment (Standing Order) Act 1946.

5. Write short notes on: (any two) (8+8=16)

a) Conciliation as a tool for settlement.

-> Conciliation is the process wherein the representative of both employer and employees are brought together in front of a third party so as to persuade them to arrive at a decision by agreement between them. Any party can request the other, for appointing the conciliation officer. The conciliation officer or conciliator can be an individual or a group of people. There will be no conciliation if anyone of the two parties rejects the offer to conciliate.

Conciliation is one of the non binding procedures where an impartial third party, known as the conciliator, assists the parties to a dispute in reaching a mutually agreed settlement of the dispute. As per the Halsbury Laws of England, conciliation is a process of persuading parties to reach an agreement. Because of its non judicial character, conciliation is considered to be fundamentally different from that of litigation. Generally Judges and Arbitrators decide the case in the form of a judgment or an award which is binding on the parties whiles in the procedure of the conciliation, the conciliator who is often a government official gives its report in the form of recommendations which is made public.

Procedure of conciliation
1) Commencement of the conciliation proceedings [Section 62]-
The conciliation proceeding are initiated by one party sending a written invitation to the other party to conciliate. The invitation should identify the subject of the dispute. Conciliation proceedings are commenced when the other party accepts the invitation to conciliate in writing. If the other party rejects the invitation, there will be no conciliation proceedings. If the party inviting conciliation does not receive a reply within thirty days of the date he sends the invitation or within such period of time as is specified in the invitation, he may elect to treat this as rejection of the invitation to conciliate. If he so elects he should inform the other party in writing accordingly.

2) Submission of Statement to Conciliator [Section 65] –
The conciliator may request each party to submit to him a brief written statement. The statement should describe the general nature of the dispute and the points at issue. Each party should send a copy of such statement to the other party. The conciliator may require each party to submit to him further written statement of his position and the facts and grounds in its support. It may be supplemented by appropriate documents and evidence. The party should send the copy of such statements, documents and evidence to the other party. At any stage of the conciliation proceedings, the conciliator may request a party to submit to him any additional information which he may deem appropriate.

3) Conduct of Conciliation Proceedings[Section 69(1),67(3)]-
The conciliator may invite the parties to meet him. He may communicate with the parties orally or in writing. He may meet or communicate with the parties together or separately. In the conduct of the conciliation proceedings, the conciliator has some freedom. He may conduct them in such manner as he may consider appropriate. But he should take in account the circumstances of the case, the express wishes of the parties, a party’s request to behead orally and the need of speedy settlement of the dispute.

4) Administrative assistance [S. 68]-
Section 68 facilitates administrative assistance for the conduct of conciliation proceedings. Accordingly, the parties and the conciliator may seek administrative assistance by a suitable institution or the person with the consent of the parties.

c) Adjudication in Industry.

-> An adjudication is a legal ruling or judgment, usually final, but can also refer to the process of settling a legal case or claim through the court or justice system, such as a decree in the bankruptcy process between the defendant and the creditors.

Normally, adjudication represents the final judgment or pronouncement in a case that will determine the course of action taken regarding the issue presented. Outside of a legal process, adjudication can also more generally refer to other formal processes of judgment or ruling that render a final decision, such as the process of validating an insurance claim .

Adjudication describes the legal process that helps expedite and deliver a court’s resolution regarding an issue between two parties. The result of the process is a judgment and court opinion that is legally binding. Most adjudication hearings center on disputes that involve money or nonviolent infractions and result in the distribution of rights and obligations for all parties involved.

Adjudication specifically refers to the process and decision issued by a government-appointed (or elected) judge, as opposed to a decision issued by an arbitrator in a private proceeding or arbitration . While both judges and arbitrators are expected and required to follow the law, judges’ adjudications also must take into account the interests of the government and general public interest. Arbitration, meanwhile, only needs to consider the interests of the parties involved.

This legal process differs from other justice-seeking or evidence-based court cases. It is instead used to settle disputes between private parties, political officials and a private party, and public bodies and public officials. In the healthcare industry, for example, adjudication can determine a carrier’s liability for monetary claims submitted by an insured person.

Adjudication Process Disputes

The types of disputes handled or resolved through adjudication include the following:

· Disagreements between private parties, such as single-persons, individual entities, or corporations

  • Disagreements between private parties and public officials
  • Disagreements between public officials and/or public bodies

Requirements for full adjudication include requisite notice to all interested parties (all legally-interested parties or those with a legal right affected by the disagreements) and an opportunity for all parties to have their evidence and arguments heard.

The Adjudication Process

Formal rules of evidence and procedure govern the process where the initiating party, or Trier, gives a notice establishing the facts in controversy and defines any applicable laws. The notice also sometimes outlines the nature of the dispute between the parties and recounts where and when the dispute occurred, and the desired result based on law. However, there are no specific requirements regarding the notice of adjudication.

An adjudicator is then appointed and a notice is sent to the defending party, who responds by submitting a defense to the claim of adjudication by the plaintiff. The adjudicator gives the plaintiff and defendant a chance to present their arguments at a hearing and makes a final ruling. This is not too dissimilar from an arbitrator in an arbitration hearing settling a business dispute.

d) Role of Arbitration.

->Arbitration is a method of dispute settlement using private entities known as “arbitral tribunals”.

Arbitral tribunals usually consist of either one or three arbitrators. The primary role of an arbitral tribunal is to apply the law and make a dispute decision by administering a so-called “arbitral award”.

In principle, arbitral awards are final and binding. They can only be challenged before a state court under exceptional circumstances. For example, it applies to cases where the parties never validly agreed on arbitration. Arbitral awards can be enforced in most countries worldwide.

Arbitration proceedings usually involve the following steps:

Any arbitration proceeding is based on a written agreement of the parties. They submit a given dispute to arbitration instead of the state courts, this becomes the “arbitration agreement”. Arbitration agreements can be found in the majority of commercial contracts, particularly in contracts relating to international transactions.

In terms of procedure, arbitration provides the arbitrators and the parties with significant freedom and flexibility. Parties may choose their arbitrators, the place of arbitration and / or the language of the proceedings. They may also agree on how to structure and how to time their proceedings. However, the parties freedom is still somewhat restricted. They may not deviate from the principles of fairness and equality, the right to be heard and the right to be represented by a lawyer.

Two types of arbitration are available; institutional and ad-hoc. In institutional arbitration, the institution assumes specific administrative functions, such as the servicing of briefs etc. The degree of involvement may vary from one institution to another, but the dispute itself will always be solely decided by the arbitral tribunal. In ad-hoc proceedings, these administrative functions are either assumed by the tribunal itself or delegated to third parties.

Hamburg is the seat of several well-known arbitration institutions, such as the German Maritime Arbitration Association (GMAA), the Court of Arbitration of the Hamburg Chamber of Commerce, the Chinese European Arbitration Centre (CEAC) and various commodity arbitration institutions. Hamburg is also frequently chosen as a place for arbitration by institutions based outside Hamburg, such as the German Institution of Arbitration (DIS) and the International Chamber of Commerce (ICC). The “Hamburg Friendly Arbitrage” is a special form of ad-hoc arbitration developed from local trade usages. These are published in Section 20 of the “Local Usage in the Commodity Trade in Hamburg” (Official Gazette No. 237 dated October 13, 1958). Hamburg based arbitrators have formed the Hamburg Arbitration Circle (HAC) as their association to organize lectures and to support the promotion of Hamburg as a place of arbitration.

Role of Arbitration:-

As arbitration becomes an increasingly attractive alternative way of resolving disputes compared to lengthy and often expensive court proceedings, arbitrators are ever more in demand and their roles increasingly important. Arbitration is often favored over formal litigation not only from a cost and time efficiency perspective, but also because it often offers more practical solutions, and as a process is structured specifically to facilitate resolution.

Thus the arbitrator’s role is a crucial one, and one that demands a unique combination of experience, knowledge and skill. It is increasingly common to find arbitration clauses in consumer and business contracts, and its prevalence only attests to its usefulness as a dispute resolution method.

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